LONDON: Negotiations between UAE incumbent Etisalat and Korek are continuing, as the Iraqi operator sets about expanding its network to cover the entire country by the middle of next year.

Dr HameedAkrawi , deputy CEO, Korek Telecom said that any tie-up between the two telcos would see the operator run as a joint venture, with Korek looking to use Etisalat's funds and management support to help it compete with the other operators in Iraq.

"We hope we can reach an agreement with Etisalat, because it is a very good company within the region and they are very much interested in the Iraq market," Akrawi said on the sidelines of the Iraq Telecoms conference in London yesterday (Wednesday).

"We are still negotiating a number of points in the licence, and any deal would also need the agreement of the CMC (Communications and Media Commission)."

With an overall penetration of some 66%, Iraqi mobile subscribers are served by three national GSM operators: market leader Zain, which has just over 10 million subscribers, Qtel-backed Asiacell with 7 million subscribers and Korek, which currently has 2.4 million, according to research firm Informa Telecom and Media.

Since deciding not to bid for one of the three licences in 2007, Etisalat's management team has spoken about entering the Iraqi telecom market via an acquisition, and Etisalat's chief financial officer Salem Ali al-Sharhan told Reuters at the start of the year it had hoped to conclude a deal by the end of last year. When asked when any deal would be finalised, Akrawi said it was "very difficult to say".

"We are continuing with our expansion in Iraq, and we are negotiating and if we reach an agreement then so be it...we are building the network to the middle and south of Iraq and the whole capacity of the system will be about 4 million. In the next six months, we will be covering the whole of Iraq," he said.

"The population of Iraq is about 27 million, and we will cover about 85%. We have already spent about US$150 million, and there will be another $100-$150 million spent over the next six months."

Akrawi said that as part of the negotiations with Etisalat, discussions were taking place regarding the potential rebranding of Korek. He said Korek's brand was likely to remain in the north of Iraq, where the company began operations and a number of smaller regional operators exist. Akrawi added that it had not been decided what to do in the middle and the south of the country.